THE CONFLICT-COMPROMISE METHODOLOGY OF THE RESOLVING THE CONTRADICTIONS BETWEEN THE INSURANCE MARKET PARTICIPANTS

The paper considers the issues of the improvement of the Russian insurance market efficiency. The authors study the essence of insurance from the point of view of the purposes of the insurance economic relations participants. The insurance market participants have several objectives: general objective consisting of the insured property interests’ protection from the dangerous accident events, and the local goal that is the profit receiving by the insurer from his business activity in the insurance market. The insurer tariff profit is included in the underwriting rate structure and is payable by the insured upon the insurance payment. The insurer local goal is not required for the insured; moreover, it contradicts his economic interests as it increases the cost of insurance coverage, which the insured buys from the insurer. The insurer, when selling the insurance coverage, generates the risk of losing financial stability and solvency. The inconsistency of the insurance objectives of the insurance relations participants and the insurer dual role as the insurance market actor are the basic factors causing the crisis state of the Russian insurance market.

The paper analyses the possibility of the contradictions resolution on the basis of the conflict-compromise management paradigm. The authors showed the advantages of the conflict-compromise methodology in resolving the contradictions between the insurance market participants, which allows eliminating the administrative dysfunctions within the process of the insured and the insurer risk management by the conclusion of local compromises.

The authors consider the insurance risk model as the logical conjunction of a probability of the insured economic loss risk and the value of this loss from the risk of accidental events.

The paper gives an example of a local compromise for elimination the contradictions between the objectives of the key insurance market participants through the prevention of the insured risks and changing the insurance rate structure.